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Times Free Press recently reported on new technology that is being used due to the credit card fees that were recently implemented. The Times Free Press spoke with a customer who purchased a sandwich from Deli-Boys using an app on her smartphone known as “Level Up.”

This Level Up app is the newest innovation designed at helping merchants avoid the 1.5 to 3 percent in credit card processing fees that accompany traditional credit card transactions. New technology, such as Level Up, is just one step in the movement to mobile and digital payments.

According to Times Free Press, Deli-Boys has been using Level Up since last September. The store liked the technology due to the fact that they did not have to pay the processing fees that they would with a traditional credit card. Level Up links to the customer’s credit or debit card. Additionally, the program requires the merchant to set up a loyalty program of some kind. The customer gets some credit from the loyalty program, and then Level Up takes up to 40 percent of each credit card dollar spent.

According to Times Free Press, the state director of the Tennessee Small Business Development center at Middle Tennessee State University, Patrick Geho, said that the first small retailers who started getting away from using traditional credit cards first started using card readers with smartphones. However, they have already switched to smartphone apps. Geho notes that more and more individual apps are being produced. The issue is getting people to use them though.

Since apps like Level Up are so new, it means that creators are still making changes and working out some of the bugs. Because of this, some business owners are hesitant to switch to these apps. More and more business owners are considering them because the lower fees and speed of processing.

Another way that some small businesses have started dealing with credit card processing fees is to pass these extra costs onto the consumer. Last month, the agreement came into effect that allowed retailers to start passing these surcharges onto the consumer.

Visa has stated on its website that in the past, it never permitted retailer surcharging, but this was required by merchants in the settlement agreement last year. Retailers who have decided to pass these fees onto their consumers can only charge as much as they have to pay the credit card companies. Additionally, the retailers are required to warn the customers at least twice prior to making the purchase that they will be charged.

This surcharge can never be more than 4 percent, and it is illegal in ten states including California, Florida, Texas, and Oklahoma. Some of the small businesses that the Times Free Press spoke with said they were not adding fees because they were afraid their consumers would not understand why they were adding extra fees.

Geho notes that the whole retail industry is moving toward using mobile devices and phones. The businesses using Level Up are also capable of logging in to see how many times each customer has visited the restaurant and when they have visited. Additionally, the business is able to see how much a customer has spent at the store and a variety of other demographic information. This means that this can provide a valuable source of information to the business owners and help them with their promotional campaigns.

The credit card companies themselves are starting to move away from using plastic. Recently, MasterCard announced MasterPass, which is a digital service that lets the card holders pay with many mobile devices using near-field communication, tags, or QR codes. Visa and Samsung had an announcement at the same time, stating that their Samsung devices will come pre-loaded with Visa’s mobile payment app known as payWave.

Times Free Press reports that a senior business leader from MasterCard notes that society is becoming more digital and that devices can now be used as shopping devices.

The industry is changing drastically. More small businesses are finding that mobile payment technology is very useful, and the addition of extra credit card fees has only spurred the move to adopting more of this technology. Many retailers are very dissatisfied with having to charge consumers these fees, so this may change in the future. However, even if it does, mobile technology looks like it will continue to make inroads and become more widespread.